Report finds Community Building Initiative failings

Victoria's auditor-general has found the State Government has not given enough oversight to a program designed to help rural towns.

The Community Building Initiative was launched in 2005 and has allowed small, struggling towns across the state to plan local projects and apply for government funding.

The auditor-general has looked at three projects funded as part of the initiative.

The report finds that the Department of Planning and Community Development has not kept a close enough eye on the projects and could have prevented delays if it had stepped in sooner to help sort out problems.

The auditor-general also criticises the process for awarding funds, saying the department did not adequately consider whether a community was ready.

The report recommends the department should strengthen the funding criteria, ensure the projects are meeting the terms of their funding agreements and do more to measure the projects' longer term benefits.